The bad news is that the Forbes estimates the Rays are turning just $7.9 million in operating income, their second-lowest mark in a decade....despite a record $188 million in revenues overall.

Yet, the folks at Forbes are no dummies, and the high value of the Rays reflects big potential earnings down the road. Which is why St. Pete councilmembers may feel slighted when the team is only willing to give approx. $2M/year to get out of its current contract.

6 comments:

They were low on the Clippers' value: http://www.forbes.com/teams/los-angeles-clippers/As well as the Dodgers:http://www.forbes.com/teams/los-angeles-dodgers/Also very very close on the Fla Panthers, Jaguars, Browns, Rams, etc, etc.

Rays value must also consider the negative impact of the Use Agreement at the Trop. With such constraints (of playing only in this stadium) and no MOU to look at alternative, any buyers will need deduct from the team value the cost of moving the team elsewhere during the term of the Use Agreement.

And based on the Forbes comments, Operating Income is $7.9M, so that means the team rely on revenue sharing big time to be profitable. This is unsustainable over a period of 3-5 more years.

It is one thing to bail out a systemically vital financial company. It is something altogether different to bail out a $625M leisure entity.

Wait, your business model requires a $700M cash infusion every 15-20 years? And you're telling me this with a straight face? And you want me to give you that infusion? Cities everywhere can spend (or not spend at all) their scarce resources way more efficiently. As Goldman products, the Rays management knows all of this. And that's what makes their song and dance all the more nauseating. There's a special place in hell for finance shysters. As the Greeks learned, beware Goldman people offering public debt schemes.

Noah, I'm going to assume when you say "potential earnings down the road" you mean a literal road like Hwy 75, when they move to Montreal.

Regarding the free market idea. Yes there may be better ways for a city to spend its money, but if another city is willing to fork over some serious coin to build a stadium, they will be the one that ends up with the baseball team. Its all about supply and demand and there is a limited supply of MLB teams.